What's the IR35 Landscape Looking Like in 2025?

As of now, the main Off-Payroll Working rules, which put the responsibility on medium and large private sector clients (and all public sector bodies) to determine your IR35 status, are still very much in play. Unless there are any major government announcements changing things, this is the setup we're working with for 2025. This means for many contracts, it'll be your client who decides if your engagement is Inside or Outside IR35.

If you're working for a 'small' private sector client, the responsibility for determining IR35 status still rests with your own limited company.

The Golden Rules for Working Outside IR35

So, what does it actually take to be legitimately Outside IR35? HMRC looks at the overall picture of your working relationship, but a few key things are always under the microscope. These are often called the 'tests of employment':

• Control: This is all about who dictates *how*, *when*, and *where* you do your work. If you're genuinely Outside IR35, you should have a significant degree of autonomy over your working methods. The client might set the overall project goals, but you're the expert deciding how to achieve them.
• Substitution: Can you send someone else with the right skills and qualifications to do the work in your place? A genuine, unfettered right of substitution (even if you never actually use it) is a very strong indicator of being Outside IR35. If the client is only interested in *your* specific services, that leans more towards employment.
• Mutuality of Obligation (MOO): Is there an ongoing expectation that the client will offer you work, and you're obliged to accept it? Or is it a project-by-project basis, with no guarantee of further work once the current gig is done? A lack of MOO supports an Outside IR35 status.

Beyond these, running your business in a business-like way also matters. This includes things like taking on financial risk (e.g., fixing mistakes at your own cost), providing your own equipment, marketing your services, and having business insurance. Our main Understanding IR35 guide goes into these in more detail.

Dealing with Client Determinations (SDS)

If your client is responsible for determining your IR35 status, they should issue you with a Status Determination Statement (SDS). This document outlines their decision (Inside or Outside) and their reasons. They must take 'reasonable care' when making this assessment.

What can you do? Provide them with clear evidence that supports an Outside IR35 determination. This could include details from your contract that highlight your independence, examples of how you operate as a business, or even a professional contract review you've had done. If you disagree with their SDS, you have the right to challenge it through their status disagreement process.

Tips for Gearing Up for Outside IR35 Work

• Focus on Projects, Not Roles: Try to define your engagements around specific projects with clear deliverables and end dates, rather than just filling a role on an ongoing basis.
• Rock-Solid Contracts: Make sure your contracts accurately reflect your independent working practices. Clauses on substitution, control, and MOO should be clear and genuinely reflect the reality of how you'll work.
• Walk the Talk: It's not just about what your contract says; it's about how you actually work day-to-day. Maintain your business identity, manage your own time (within project needs), and avoid becoming too 'part and parcel' of the client's organisation.
• Consider Professional Help: Getting your contracts reviewed by an IR35 specialist can be a lifesaver. They can spot potential red flags and suggest improvements.

Curious about the financial difference? Use our IR35 Calculator to see how an Inside vs. Outside IR35 status could impact your take-home pay.

So, is it a 'Yes' for Outside IR35 in 2025?

Yes, it absolutely can be! Working Outside IR35 in 2025 is perfectly possible for contractors who are genuinely running their own independent businesses and whose engagements reflect that. It just requires a bit more diligence. You need to be clued up on your contracts, clear about your working practices, and understand how client determinations work. Stay informed, be proactive, and you can continue to enjoy the flexibility and rewards of contracting Outside IR35.